One click. No payment. No problem — until it is.
Buy Now, Pay Later services promise convenience by letting shoppers split purchases into smaller payments, but what feels manageable today can quietly spiral into serious debt.
“Buy now, Pay Later can make big purchases feel easier because you don’t have to pay anything, or you have to pay a lot less up front,” Manager of the Client Advisory at Tolleson Wealth Management, Blake Masterson, said. “While that can help with budgeting in some cases, it can also lead people to spend way more than they planned initially, because the full cost of the purchase doesn’t feel immediate. So it has a sort of compounding effect over time.”
With payments being broken into smaller pieces, the total cost of a purchase can feel less significant at the moment. Instead of thinking about the full price, consumers may only focus on the smaller monthly payment. Over time, however, multiple payment plans can stack up and become difficult to manage.
“Sometimes there’s no interest charged at first, at the end of the day, you still owe these companies money, and missing payments can lead to fees or really high interest rates; it can hurt your credit score because you’ve missed payments that you owe,” Masterson said.
The short-term convenience of Buy Now, Pay Later can also hide how quickly debt builds. When people use these services repeatedly, it can lower their credit scores and make it difficult to buy a house, car, or take out a loan.
“Loans can add up really quickly if you use them often. I refer to this compounding effect where if you have 10 different pay later plans out there, number one, from an administrative standpoint, that can become fearsome to manage, and that risks, you know, missing a payment,” Masterson said.
Installment payments can make purchases feel easier in the moment, even if the long-term cost is higher.
“With Buy Now, Pay Later, the accumulated interest the company charges can be brutal — customers end up paying a lot more than the original price if rates are high,” Private Wealth Manager Jeff Sears said.
The popularity of Buy Now, Pay Later is connected to how people view spending. When a purchase is divided into smaller payments, it can feel more affordable, even if the total cost is the same or higher.
“It gives a false sense of abundance; it doesn’t matter what you pay now because you can just pay it off later.” MAPS Business design and leadership teacher Jill Lewis said. “I just think it’s mostly on the negative side, as far as personal finance goes.”
Younger consumers, like students, may be especially vulnerable because many are still learning how financial systems work and may not fully understand the risk yet.
“They assume that teenagers don’t have a lot of experience in finance, personal, or business. They assume that lack of experience equals immaturity,” Lewis said. “Therefore, poor financial decisions on the part of the team, which equals excessive buying, which obviously is good for the company.”
Payment plans like Buy Now, Pay Later can change the way people, especially students, think about spending because the payments are smaller, which influences how they decide to spend money.
“I’m pretty careful with money. I babysit to make most of what I spend, so I try not to waste it on random stuff. If I buy something, it’s usually something I’ve been wanting for a while or something I actually need,” sophomore Sophia Donohoe said.
Smaller payments may also lead people to buy things they might otherwise skip, leading to impulsive buying.
“If people only have to pay a little at first, they might buy a lot of things without really thinking about it,” Donohoe said.
As Buy Now, Pay Later services continue to grow in popularity, understanding how these payment plans work is important before using them. What feels like a small purchase today can quickly turn into a large financial responsibility.
“Buy Now, Pay Later is a long-term pain for a short-term gain,” Sears said.
